This invention relates generally to prediction of responses using mathematical algorithms for quality measurements and more specifically to the use of Classification and Regression Tree (CART) analysis for prediction of responses.
In a financing example, an amount collected on a charged off loan is a function of many demographic variables, as well as historic and current information on the debtor. If one desired to predict the amount paid for an individual borrower, a statistical model need be built from an analysis of trends between the account information and the amount paid by “similar” borrowers, that is, borrowers with similar profiles. CART tools allow an analyst to sift, i.e. data mine, through the many complex combinations of these explanatory variables to isolate which ones are the key drivers of an amount paid.
Commercially available tools for CART analysis exist, however, there is no known tool that allows the user to build a model that predicts more than one measurement at a time (i.e., more than one response in a CART application). It would be desirable to develop a CART tool that allows a user to predict more than one measurement at a time, thereby allowing for a multivariate response CART analysis.